Last week we saw cinema stocks get a welcome boost on the stock exchange as Apple announced a splashy $1B a year goal for theatrical-destined products. To date, the tech giants-turned-streamers have been slow to send their films for theatrical releases unless they’re pitching for awards season notice, so it’s an interesting change to see in the works. Brandon Blake, entertainment lawyer and industry insider from Blake & Wang P.A, has more on this intriguing development for us.
Expanding Theatrical Slate
The announcement of the plan to invest $1B a year into theatrical releases, beginning this year and ramping up to full output by 2025, has yet to be officially confirmed by Apple, ironically. However, at this point it’s been telegraphed globally without a squeak to contradict it, so it seems safe to say it’s their current plan. No doubt an official statement will follow with time.
We saw ex-Disney Content/Marketing exec Ricky Strauss move to Apple TV+ recently, so it is clear that Apple is making a serious push into growth for its streaming arm- and, as the pandemic inadvertently proved, a strong theatrical release can work wonders for boosting streaming revenue and uptake. Apple won’t be the first to take this strong theatrical push, either, with Amazon already eyeing an expanded theatrical release model for its products.
The Amazon Model
Amazon’s new theatrical plan included the release of 12-15 movies a year, building on the groundwork gifted to it by the purchase of the entire MGM 4,000 film back catalog for $8.45B a few years ago. Unlike Apple, this gives Amazon the rights to big-name franchises (including James Bond), so there’s little wonder they want to see MGM keep making movies.
For Apple, it will be a little different. With no legacy Hollywood studio at their fingertips (and the accompanying well-honed distribution network), it will have to partner with other studios to boost its own releases.
Despite this need to start from the ground up, the news of Apple’s plans saw cinema stocks get a pleasant boost last Thursday. Cinemark found itself up almost 6%, and AMC closed around 3% higher. IMAX, one of the few theatrical chains to have truly seen a post-pandemic recovery, finished 2% higher, while Canadian-based Cineplex closed at 4% higher.
At this point, the value of the combined theatrical/streaming model has been well proven. A pivot to theatrical releases should also help Apple boost its subscriber base, and potentially attract true A-list cast and titles to its slates as well.
Will that $1B input be the savior of the still-ailing exhibition industry? On its own, no. However, with more and more streaming platforms beginning to appreciate the bottom-line boost that a well-planned and marketed theatrical release can bring to the table for their streaming services, we can hope this will signal a turnaround for the industry. In particular, cinemas have been near-begging for an increased volume of films to keep audiences flowing in the doors, and at this point, more product has to be good news for everyone.